Browsing by Subject "Strategic Cost Management"

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    Open Access
    The role of environmental accounting in strategic cost management
    (2010) Effendi, Mohamed Sinan; Holman, Glen
    Environmental issues in the world today and often seen in the media are causing a stir in the business world. The effect is that the environment in which businesses operate has significantly changed over the past two decades and businesses are faced with new risks and challenges as well as new opportunities in addressing the needs and claims of stakeholders. Environmental accounting is now on an expansion path with increasing focus on the environment. In order to benefit from the accounting data, strategic cost management can be used as a philosophy to provide competitive strategies. This research paper will describe the environmental component of business and describe the role of environmental accounting in strategic cost management. Furthermore, an assessment will be performed on a South African organisation. The assessment will demonstrate how a South African organisation has reacted and integrated environmental business aspects into their organisation.
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    Open Access
    Using activity based costing in customer profitability strategies in a South African SME environment : a South African case study
    (2009) Potgieter, Theodorus Daniel; Chivaka, Richard
    Small to medium scale enterprises (SMEs) face an ever increasing competitive and unforgiving business environment. Deregulation. increased global competition. the global economic downturn and the technical recession that South Africa has entered into (SACCI. May 2009). place increased pressure on their profit margins and ability to generate positive cash flow. These tough trading conditions are likely to continue for some time to come (De Klerk. 2009) and therefore companies need to respond appropriately to these challenges in order to survive (Sartorius et al. 2007). Survival is dependant on positive cash flow generated by profitable trading. Yet. many SMEs do not have effective strategies in place to maximise their customer profitability in order to enhance their cash flows. The challenge is therefore the development and adoption of practical customer profitability analysis tools for use by these SMEs. In this research an investigative single case study in a business to business setting based on detailed field work was performed. The study focussed on a typical South African SME trading with all the major retail groups in South Africa. The case study was performed via diachronic research into the use of Activity Based Costing (ABC) in customer profitability analysis (CPA). The objective of the study was to critically evaluate whether ABC is a practical tool for conducting customer profitability analysis in a South African SME environment. This was done by investigating what might motivate a SME to adopt ABC and determining the specific benefits likely to accrue to a SME following the implementation of ABC. The research has shown that the implementation of ABC made it possible to identify customers who. despite the fact that they generate a modest gross profit. are in fact unprofitable as a result of the overheads consumed by them. This insight shaped future marketing. pricing, sales and customer support strategies. More specifically, it assisted management to maximise income by identifying areas in the value chain to which resources should be channelled for maximum profit while still maximising customer satisfaction. This led to a substantial improvement in overall profitability. Owing, firstly, to increased gross profit following enhancements in the pricing policy and secondly, to increased sales volumes as a result of revised marketing strategies and new product launches. No significant additional costs were incurred in implementing ABC. A standard desktop computer and readily available accounting and spreadsheet software were used in the CPAs. No outside consultants were used since the champion of the project was knowledgeable in the application of ABC techniques This suggests that it is both practical and cost effective to implement ABC in a SME environment provided the necessary skills and infrastructure are available or can be outsourced. Although these findings are of a single case study and cannot be generalised, the combination of this empirical case study and the literature review findings presented in this study strongly suggest that Activity Based Costing is a practical tool for the formulation and measuring of outcomes of customer profitability strategies in a South African SME environment.
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    Open Access
    Value chain analysis along the petroleum supply chain
    (2010) Rusinga, Nectar; Chivaka, Richard
    The wide range of the petroleum industry's products as well as the varied value of these products coupled with the global nature of the petroleum industry presents both challenges and opportunities within the petroleum supply chain. It is along this supply chain that challenges for creating value for the customer exist as well the opportunities for reaching this goal. Value chain analysis methodology has been hailed as being capable to lend itself to process improvement challenges faced along supply chains. To achieve this objective, a case study method was used to collect and analyse data. This dissertation identifies and follows one of the supply chains of a petroleum company operating in South Africa to investigate how value chain analysis can be implemented along its supply chain.